Good News: It's Almost Over After Pelosi Says Congress Looking At "Two-Tiered" Deal

With 23 hours left until the Asian open (or, more importantly, 19 hours until FX trading resumes) and with today's round of talks now official over after a one hour meeting in Boehner's office with congressional leaders achieved nothing, it is becoming clear that the final debt ceiling outcome will be "no change" in spending or taxing habits and a temporary hike in the debt ceiling, so that the soap opera can be repeated again every three months... and again... and again... and so forth for an "extended period of time" as "transitory solutions' become the new grand consensus. At least we now know the phrase for complete, impotent incompetence in the Hill is: "Two tiered approach" which is how Nancy Pelosi called the last minute attempt at compromise. Per The Hill: "House Minority Leader Nancy Pelosi (D-Calif.) said Saturday night that congressional leaders are considering a two-tiered approach to raising the debt ceiling and reducing the nation’s long-term budget deficit. Pelosi reiterated that she backs “a long-term extension” of the $14.3 trillion debt limit, putting her in line with the demands of President Obama and Senate Majority Leader Harry Reid (D-Nev.)." Alas this now appears to be a mirage: at best the Republicans will agree to a $200-300 billion extension to get the Treasury through for another 2 months (although at the delayed run rate, Geithner needs to issue $350 billion in debt right now just to catch up with where bond issuance should be). And then again until the general public gets so tired of this charade that they vote Obama out. Or so the republicans think. Or who the hell knows what they think. Or anyone else for that matter. It does appear however, that unless there is a definitive and consensual proposal on the table by 4 pm tomorrow when FX opens, the market will no longer be able to ignore what is happening in DC. Which brings us to the best news of the day: this whole farcical spectacle is almost over.

Boehner told House Republicans earlier in the day that he wanted to present a plan by Sunday afternoon to avoid rattling the Asian markets.

Aides have said the Speaker continues to insist that the size of spending cuts exceed the size of any increase in the debt limit, meaning that lawmakers would need to agree on more than $2.4 trillion in cuts to extend federal borrowing beyond 2012.

Pelosi said the leaders are looking at a two-tiered approach, which would likely combine immediate spending cuts while creating a process for Congress to enact entitlement and tax reforms over the next several months. She hinted, however, that the revenue would come in the second “tier” of the process.

“One option is to do something in two tiers, and I don’t think we can accomplish what we need to do in deficit reduction without revenues,” Pelosi said.

Asked if the revenues would come in the second tier, she replied: “It would have to be if we are going to go into … what we need to do is to greatly reduce the deficit. But it is not over yet.”

Pelosi said congressional leaders are still working but that no further meetings were scheduled as of Saturday night.

Elsewhere, in a desperate attempt to prolong the drama, Harry Reid said that he was "deeply disappointed" in debt
talks with Republicans, saying a lack of progress was bringing the
United States closer to default.

Reid issued the statement following a meeting of congressional leaders. Reid insisted that a deficit reduction deal should also raise U.S. borrowing authority through 2012 so that the U.S. credit rating would not be downgraded.

To be honest, we have had enough with ridiculous diversions. Just pass the damn "deal" already so that we can all resume observing the global economy collapse in on itself first slowly, and then very very fast.

Well, his name is Boner afterall. Since when did he give a shit about rattling Asian markets, and when did that become a priority for the timeline upon which we enact legislation that would impact entire generations of future Americans/Chinese Indentured Servants?

Mr. Market has been installed as our new Dictator, with the elected officials merely executives catering to his needs. Obama warned on Friday that "Wall Street will be watching on Monday," so Boner one-upped him with "the Asian markets on Sunday" bullshit.

When are people going to confront this new face of the coup by the financial industry?

Are you sure? USA still bankrupt. Kick their dumb asses down the road. Still borrowing 40% of what we spend. Nothing has changed & won't till dollar collapses, hopefully soon. DXY down 7% since Jan. even with all those reserves.

“We’ll go through the gate. If the gate’s closed, we’ll go over the fence. If the fence is too high, we’ll pole vault in. If that doesn’t work, we’ll parachute in but we're going to get health care (Debt Ceiling raised) passed for the America people."

So, I'm sitting here about to pull the trigger on 20 oz of gold. I'm already thinking all hell is going to break loose overnight Sunday and that Monday morning is going to be gut wrenching entertainment. Then I read this post.

I am in the same boat. I was going to buy more gold on Friday and I didn't. I figured there would be a deal and a temporary sell off in gold. So I decided to wait. Now I don't know what's going to happen with these clowns.

Congressional authorization for several FAA programs expired at 12:01 a.m. on July 23. As a result, nearly 4,000 FAA employees are now furloughed without pay. Those employees affected by the lapse in authorization have been notified by their managers and will receive a furlough notice via FAA email.

The Central Banks and hedge funds begin the task of negotiating the bailout of the US to "SAVE" the debt holders large hair cuts only if the US will bow to austerity measures.

The New World Order wishes to control the mighty US military and contain the local elites that dare challenge central control. The banksters will decide who wins and loses, further culling the herd.

The DEFAULT is the means to restructure the US into a global police force headed up by the United Nations. Within the cloud of financial chaos the NWO and the oligarchy which directs it will move country by country to force compliance through defaults and restructuring as they see fit.

This has been the PLAN from the beginning, we are now at this time and place.

The fight club has served ZH readers well to this point in time. My question to the brethren is what is PLAN B?

Let's see. Congress Leaders choke down a plan that includes a temporary raise of the ceiling in exchange for Republican agreement. Obama wants everything to last until next Election. The Republicans don't want to spend a dime.

We raise the deficit and get downgraded, markets throw the paper out of the pram and Congress will fall over themselves when the special interests pile em like Amazon Piranha fish.

Plan B.... Pentagon Warning Order to prepare for a Israeli-Iran war.

That is my bet.

In the mean time I am well positioned to enjoy one of the greatest trades ever in the metals should it come to fruition.

I agree with your anger. When is the last time you got close to Soros? My hope is things don't get that bad. I like you, will defend our families and friends to the bitter end. I just hate to go there.

Repeat our mistakes... the length until the next collapse purely being a function of the rigidity of our next system... but, it will probably seccumb in ~80 years naturally... with an unknown extension period via financial/monetary wrangling. If we really, really understand how we got here and act to prohibit such conduct in the future, we might get a couple hundred years...

Debt ceiling negotiators think they've hit on a solution to address the debt ceiling impasse and the public's unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress.

This "Super Congress," composed of members of both chambers and both parties, isn't mentioned anywhere in the Constitution, but would be granted extraordinary new powers.

Legislation approved by the Super Congress -- which some on Capitol Hill are calling the "super committee" -- would then be fast-tracked through both chambers, where it couldn't be amended by simple, regular lawmakers, who'd have the ability only to cast an up or down vote.

Might want to read the article...this was a dual idea from repbs and dems.....there is no difference between the 2. It is a duocracy. The only people allowed to legally insider trade are members of congress (and their staff). Corruption is on both sides of the isle.

Squawk had Buddy Romer from lousiana who joined the presidential race. He said, (para) lets make crap from china non-deductable in the tax code. he cited chapter and verse where he was going to do it. After the segment, Joe K, Michelle C^2, the other regular host and some guest host D-Bag who talked about his vacation ranch in wyoming mocked Romer for trying to sophmorically flex his faux Harvard MBA credentials.

I know that we bash the banks alot here on ZH, but more than anything, the banks want to be paid back. They are hurting pretty bad too. Do you know who is not hurting? Tax code junkies of all shapes and sizes, and thier dealers, such as PWC, BDO, G.E., google, Mr Softy, etc. Where all the legitimate harvard MBAs work, when those folks aren't doing Demopublican stints in D.C.

For me I buy gold when we have dips. I do not buy on rumors, what ifs, or guess work. Debt ceiling, no debt ceiling. It does not matter. We are going to do this until it blows up half the planet and then, and only then, they will be forced to make changes. Until that moment in time, just carry on. Forget headlines and continue on your course.

I wish I could say I have been buying for decades. I am trying to rebuild my wealth that was lost in the market , divorce , and finally bankruptcy. I have to wait for those pull backs to accumulate as much as I can. I just hope the wheels don't fall off the wagon too soon on me.

Hulk my friend! I have twice as many ounces of silvr as (Au + Pt combined)! Of course the arithmetic means that my Au is worth much more than than my Ag, but if silver makes a huge move, I am OK with that!

This is just silly. The debt is going up exponentially, has been for years, and will never do anything else. They should just pass a new law that says: "The debt ceiling is equal to the debt" and leave it at that. Treasury can issue bonds, debt ceiling goes up, all good. There is no way to stop it, only unfund the government prior to an election but only temporarily as the new president borrows his ass off to make everything good again.

One way or another, the ceiling should be scapped because it means nothing.

I'm with you. It's comforting to believe that we've just elected a bunch of losers, and with voter education and renewed "civic pride" etc., we can have something better; something functional. It may be comforting to believe, but it doesn't explain what I see. I don't have to believe in HAARP caused earthquakes, chemtrails, JFK multiple-assasins, and UFOs to believe that our global masters have an agenda that goes beyond what is explicitly communicated by CNN/Fox.

stop all the conspiracy crap already... the debt crisis is just one of the many issues facing humanity... when the smoke clears things will be massively different... whatever you think will be of value will be worthless... you can't eat gold...

Worked for Japan so far. Debt +200% to GDP and the rating agencies haven't done anything to them. Demographically they will never be able to pay down....the world ignores it. I can see where the
Mentality comes from....I think they are wrong but I can understand it.

Krauthammer suggested $500 B temp raise inn ceiling and buy time. Works against Bamm. He just wants anything that will put it to bed until after the election. No mention about what is best for the country.

Unfortunately for you and I sir/madam, leaving the Decepticrats in charge is like giving a 13-year old your American Express card and ignoring what they're doing with it. Here's whats gonna happen:

The Republicons get a slim majority in the House and whittle the Senate down close to parity. ALL legislation proposed by Obamatron gets stuffed into a toilet somewhere and Obamatron returns the favor by vetoing anything for the next two years, good or bad, it won't matter, it will be vetoed. So much for having adults in GOVT. The system spins merrily along until bad earnings numbers start showing up in the large corporations that cater to the US market(s) [no one can spend due to the ever-increasing unemployment numbers]. At that point, the Republicons will cave in and try to co-opt the game plan of the Decepticrats, namely, trying to "Stimulate" the Economy with MORE Govt spending! So, what was the point of electing the Republicons again? The market(s) continue exploring subterranean landscapes until the rest of the World goes up in flames as well. None of this will end well. If, by some miracle, the Decepticrats hold onto the House, THEY will continue to try to "stimulate" the Economy with MORE Govt spending, and again, we end up burnt to a cinder.

Take your "Progressive" social justice outrage somewhere else, elementary school ideas of what's fair and just cannot face the real world of the jungle and survive -- congratulations, your poorly thought out ideas of Socialism have/will kill millions, if not billions -- thanks for playing, game over!

Don'tcha hate it when thinking through the insane "Progressive" proposals to their logical conclusions start coming true? :>(

It's pretty fague and we don't know what he second teir taxes will be or won't happen. It could be that Obama is tying to get this passed with the cuts, but then when the democrats ask or demand (we don't know if this will be written in law or it's a pledge to revisit) tax increases and such. They are done pure and simple, they want this done before 4 pm sunday because as El-Arian of PIMCO made comment that the US had to have something in 2 days and with nothing and a little over a week until August 2 the markets would bleed red fast.

Compound interest forces the exponential growth in debt. Once the shackles of the gold standard was finally cast off in the 70s, the government was free to stimulate the economy to prosperity, but it became impossible to reduce spending, and deficits soon got out of control. They know they are screwed - cannot increase debt or raise taxes and cannot cut spending - but they are making a good show of pretence, in order to placate the voters. The rest is noise, we are already well past the point of no return.

The surpluses weren't quite what they seem. A big factor was the tax revenues that came from the equities boom, especially tech stocks. After the markets collapsed at the end of the decade, equity losses mean the tax surplus went, and even was repaid as people offset losses vs historic gains and got rebates. There were also some fun and games done with Social Security, playing around with inflation rates.

I'm not a trader and am new to all this and still trying to understand it fully. When TD says the FX markets will no longer be able to ignore the lack of a deal, is he talking about a decrease in the dollar or just a ton of volatility? Doesn't it seem that raising the debt ceiling would be worse for the dollar long-term? If anyone could help explain the correlation, I'd really appreciate it.

Well, you see, extending the Bush tax cuts is not really spending, now is it? As for defense spending, "Shut up," he explained.

By the time they get our 401K's and other savings, do you realize that all of the interest paid on the national debt will go straight to the top 0.1%. Thus, it behooves the Fed to monetize until there is no tomorrow, which means that we will literally be supporting billionaires with half of the taxes we pay (the other half going to the military and their contractors, and some minor odds and ends). Pretty clever, no? Just like in the middle ages, most of what you produced went to the feudal lord and you got to keep the dregs of what was left. All of this QEing and raising taxes leads to that result and that result alone. The NMA--the New Middle Ages aka NWO.

Couldn't agree more! Talking about feudal lords and middle ages : In the context of the tragic events of Oslo where religious/race intolerance becomes a BIG issue now in modern societies both sides of the pond, read my book about the Viking pagan adventurer who fought all religious zealots during the Crusades. It's based on a real character in history, and tells about the birth of the Chardonnay grape in Palestine. So its not all blood n guts. There is then as now the dream of this pursuit of happiness...

I'll have to look that up when my internet reception is better. Incidently, I should have written "schreiten" in place of streiten in my Goethe quote. "They stride from mountaintop to mountaintop." The name of this poem is "Was unterscheidet Menschen von Goettern (I don't know how to make an umlaut in this editor.)--that is, "What distinguishes men from gods". This type of poetry, in which Goethe is sui generis seems prescient, given that the apex of the social pyramid can only grow narrower and narrower until...the Antichrist? At any rate, it reflects how the top 0.1% see themselves. Now they can begin the process of recursive cannabalism and digestion until there is only one left, presumably a freemason!